Energy
Monday, January 29th, 2024 3:46 pm EDT
Key Points
- Oil Price Decline:
- Global benchmark Brent fell $1.15, or 1.38%, to $82.40 a barrel.
- U.S. West Texas Intermediate futures dropped $1.15, or 1.56%, to $76.79 a barrel.
- Concerns about China’s economy heightened due to the liquidation of China Evergrande, the world’s most indebted property developer, leading to worries about softer crude demand from Beijing.
- Drone Attack Impact:
- Oil prices initially rose over 1% after an unmanned aerial drone attack by Iran-backed militants killed three U.S. service members in Jordan.
- The attack occurred near the Syria border, marking an escalation in the Middle East amid rising tensions, including Israel’s war on Hamas.
- The Islamic Resistance in Iraq claimed responsibility, pledging support for the Palestinian people in the Gaza Strip.
- Middle East Escalation:
- Tensions in the Middle East increased with Israel’s war on Hamas, which began on Oct. 7, resulting in over 1,200 deaths in Israel and more than 26,000 casualties in the Gaza Strip.
- The recent drone attack followed attacks by Yemen-based Houthi rebels on an oil tanker in the Red Sea, further contributing to regional instability.
- The Red Sea incident involved a petroleum products tanker vessel, operated by Trafigura, catching fire after being struck by a missile in the Gulf of Aden.
Oil prices experienced a decline on Monday due to concerns about China’s economy following the liquidation of China Evergrande, one of the country’s major property developers. Global benchmark Brent dropped 1.38% to $82.40 a barrel, while U.S. West Texas Intermediate futures fell 1.56% to $76.79 a barrel. The court-ordered liquidation of China Evergrande has added to the existing debt crisis in China’s real estate sector, raising fears that Beijing’s demand for crude could decrease. However, earlier in the trading session, oil prices had risen over 1% in response to a drone attack launched by Iran-backed militants that resulted in the death of three U.S. service members in Jordan. The attack was attributed to radical Iran-backed groups operating in Syria and Iraq, and U.S. President Joe Biden pledged to hold those responsible accountable. Additionally, the situation in the Middle East has escalated, with tensions rising after Israel declared war on Hamas, and Houthi rebels in Yemen targeted an oil tanker in the Red Sea on Friday. The tanker, operated by Trafigura, caught fire after being struck by a missile in the Gulf of Aden.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/29/oil-prices-higher-after-iran-linked-drone-strikes-kill-us-troops.html
